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NATIONAL REPORT — Shelf space allocation for tobacco in convenience stores is shifting as the popularity of the various tobacco segments ebbs and flows.
An exclusive retailer study conducted by Convenience Store News found that just about half of the respondents indicated they are upping their space allocation for electronic cigarettes (47.7 percent) and vapor products (53.1 percent).
Where are they finding the space? According to the study results, 25.4 percent of the retailers have decreased cigarette space. Cigars, papers and pipe/cigarette tobacco have also all seen double-digit decreases in shelf space so the shift is likely being spread out across several segments.
CSNews conducted the survey among convenience store retailers on the current status of their tobacco programs. Responses from a total of 90 retailers are included in the results. A total of 59 percent of respondents represent chains (two or more units), while 41 percent are single-store operators. Respondents operate an average of 121 units.
All respondents carry cigarettes and other tobacco products at their stores, while 91 percent have electronic cigarettes and 69 percent carry vapor products.
In terms of category performance, the majority of retailers noted that their cigarette unit sales on a per-store basis either increased or stayed the same in 2014 vs. 2013. Only 21.3 percent reported a decrease. They painted a similar picture for OTP dollar sales, with only 17.6 percent of retailers reporting a decrease in the same time period. (CSNews did not poll retailers about their cigarette dollar sales because taxes vary so widely from state to state.)
Breaking down OTP by segment, just about half of respondents (52.6 percent) said their smokeless tobacco dollar sales increased from 2013 to 2014 and a little less said their cigar dollar sales increased (41.6 percent). Both segments, however, notched noticeable declines for other respondents: 37.7 percent for cigars and 32.9 percent for smokeless tobacco.
The CSNews retailer study also found more evidence that the e-cigarette segment is beginning to level off. About a quarter of respondents said their e-cigarette dollar sales — which includes disposables, rechargeables, kits and cartridges — remained the same year over year, while 18.3 percent said their sales had actually decreased.
Not surprisingly, the majority of retailers (62.3 percent) reported an increase in dollar sales of vapor products, which includes vaporizers, vape pens and e-liquids. That jump could be a result of more retailers now offering vapor products.
For full results of the study, look in the April issue of Convenience Store News.